US Treasury Secretary Scott Bessent has publicly supported expanding the Federal Reserve’s FIMA Repo Facility, a mechanism allowing foreign central banks to temporarily swap US Treasury holdings for dollars, currently capped at $60 billion per institution for up to seven days. This announcement comes days after a coordinated US-Japan intervention to stabilize the yen, with potential purchases estimated between $5 billion and $10 billion, as Japan holds one of the largest stockpiles of US Treasuries. The current FIMA capacity may prove inadequate against nearly $3 trillion in foreign central bank deposits at the New York Fed. An expansion of this facility would inject more dollar liquidity into global markets, creating a more favorable environment for risk assets like Bitcoin, which has historically shown vulnerability during periods of sudden global liquidity withdrawal.
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